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Out of whack: Domestic dealerships outnumber Asians by 5 to 1 margin

The amount of automotive dealerships in the United states is staggering. Domestic dealerships alone number over 15,000 in the US. For perspective, there are less than 13,000 McDonald's restaurants in the US. At the current rate, the Detroit three's dealerships are shrinking at a three- to four-percent rate, much slower than share declines that are crippling the domestic automakers.

The sales number gaps between the domestics and Asians is equally astonishing. Your average Dodge dealer sells only 375 vehicles per month year. In stark contrast, your average Toyota dealership hits nearly 1700 sales in the same time period. Steven Girsky, an industry analyst and former GM adviser, placed the desired amount of downsizing at two-thirds of the entire domestic dealer-body.

While most domestic auto dealers will tell you that there are too many dealerships out there, they are understandably inclined to think the other guy should shut down instead of them. Others are looking for corporate buyouts from the Big Three, but Ford, GM, and Chrysler just can't afford to foot the bill for a combined 10,000 closures, many of which would cost well over $1 Million dollars. Ford and Chrysler are actively trying to buy out dealers, but GM is saving its money for more new product. The targeted dealer buyouts from Ford and Chrysler will likely be far fewer than what is needed. Overall, this means little to you the customer. If you're in the mood for a new car and don't want to spend all day waiting to be assisted, it may be a good idea to hit your neighborhood Dodge dealer. You can walk in the door and have no trouble finding a salesman that's willing to deal to get a sale.

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Anonymous

8 Years Ago

As I read this article and saw the picture I couldn't help but think I know this building. If I'm not correct this is a old ford repair shop in my hometown of Sheridan, Wyoming... I didn't not expect to see that at all.

Anonymous

hate to tell you, but I don't work for a Ford dealership; I'm not really a Ford fan, either.

I have been in and around the car business my entire life, and have no problems seeing any prospective from both sides.

I owned a Dodge dealer in California for ten years, from 1983-1993. Chrysler was eliminating three dealers in the Burbank/San Fernando Valley area, and mine was one of them. they were extremely fair with their buyout offer.

I would not sign any of the sale papers until everyone who wasn't retiring was already placed at another dealer with a job, at the same wage, or more. this was EVERYONE, including lot attendants and janitors. five people out of forty retired.

we had a big party at the end, I gave away $1,000 to everyone for every year they had worked for the dealership. this included the time they had been there before I bought it. some had been there thirty years; they each received $30,000. one of the ladies in the office had been there for 35; besides the cash, I gave her the last new Dynasty we had on the lot. there was no one who walked out of there with less than $1,000.

after all was said and done, I gave away about 40% of what I received from Chrysler. it was all worth it, though; without all these great people, we could have never taken this small dealership from selling 15 cars per month to the 95 we were selling at the end. it was truly a wonderful ride.

we're certainly not all cut from the same cloth; just like any business, there are great people, and jerks, too.

I've said it a million times on posts here on autoblog; all the dealer naysayers need to spend a week working at a dealership. their attitudes would do a complete turnaround. not all of us showed up for work in a shiny $4,000 suit; I don't even own one. my standard "dealer principal" outfit was shorts and a T-shirt. no ego issues here.

the wonderful thing about the internet is you never know if the person writing is 16 or 60. I never speak about subjects I have no knowledge of, like sports or computers, but do like to think I've had some experience concerning the car business.

Anonymous

8 Years Ago

Also, I just wanna stick a knife in the eye of those homo-nerds who told me dealerships would be gone by 2005!(BACK IN '99)YOU FREAKIN' IDIOTS. I hope you invested in those stupid companies and lost all your money.

Anonymous

8 Years Ago

Having lived in rural areas of Texas and Pennsylvania, I'm not surprized to find that there are more domestic auto dealers than there are McDonald's restaurants. I've lived in several areas where there was NO McD's and NO Burger King. As has been pointed out, being near a dealership in these areas, when service was needed was nothing short of a godsend. I can get a sandwich somewhere other than a fast food restaurant.

However, it would behoove factories to think long and hard when they award a franchise. Here in Memphis, the Toyota Camry outsells it's domestic rivals out of half the number of dealerships. The ratio of Asian to domestic dealers in this area follows what was found in this article....1 to 2.

AzMike, I live near a military base, and I still had to "educate" the SALES MANAGER at my local Ford dealership. It's been my experience that dealer salespeople (pretend?) don't seem to know what rebates are offered on their products, but amazingly they can tell you what their competitors offer. I realize it would take a computer to keep up with these rebate/financing plans...so why is it the "only" computer at a dealership seems to be in the F & I office?

Anonymous

8 Years Ago

AzMike,

You're 100% correct

And how many folks here know this?

"I wouldn't believe anything J. D. Power says. Mr. Power's intense dislike of domestic dealers is legendary; very few months pass without him spouting his venom on the editiorial pages of Automotive News.

for those who aren't aware, he went to domestic manufacturers in 1980, trying to pitch the idea of a customer satisfaction index. they laughed him out of their offices. he found more receptive ears at the import companies.

he's still returning the favor."

You had to be in the business at the time to know just exactly what was happening with J.D.

The number of points is not the problem at all, many businesses are in competition with themselves. If someone is willing to put up the money to open any franchise, that's their decision. The other part is, you never know which dealership, might just turn into "golden dealership" the more the merrier.

Anonymous

8 Years Ago

Jim,

you might want to try comparing apples and apples. what similarities do these two experiences have with each other? was there a $3,000 rebate and a $500 military discount on that Honda? didn't think so.

a military discount is not something that most salespeople deal with on a regular basis, unless the dealership is near a military base. a quick conversation with a manager in ANY dealership will always answer any questions you may have. they are the ones who are aware of any special programs that the manufacturers have. many programs change on a daily or weekly basis.

Anonymous

8 Years Ago

The dealership plays an important role in perception of the company and product.

It is no surprise that foreign sales are higher. I've noticed that most foreign dealerships are open 7 days, and have longer hours. The domestics closed early, and usually took Sunday off. Any dealerships that are open are packed on Sundays.

How the customer is treated during the sale, and subsequently, the service life of the vehicle plays a crucial role.

Anonymous

8 Years Ago

"hit your neighborhood Dodge dealer. You can walk in the door and have no trouble finding a salesman that's willing to deal to get a sale"

You would think so, but my father in law tried to buy a Jeep Liberty in central Ohio back in November and December, when they had a $3000 sale and $500 military discount advertised on their web site. He went to four Jeep dealerships before he found a sales person willing to admit that these discounts existed and confirm he would not be negotiating from sticker price. The terms he used to describe these sales people I can't post here.

Compare that with my recent Honda buying experience, at a farily small volume dealer. Four emails, two visits of about 40 minutes each (one to sign papers, one to pick up the car that came from another dealer due to color choice) and I was done, and got it for $1000 less than most websites said I should try to pay for it.

And finally to comment on ispeakenglish's post, saying "Learn how to use the English language if you report to be any type of serious journalist", I believe the word he intended to use was purport, not report.

Purport - to have the often specious appearance of being, intending, or claiming; "The letter purports to express people's opinion"

Anonymous

8 Years Ago

It looks like there was a big mistake in the re-reporting (better to just read the original article in Detroit News). However, now that the mistake has been pointed, and acknowledged by the author, the mistake still remains in the submission. This should be corrected ASAP to maintain credibility among readers. Thanks to all the readers who pointed out the egregious error.